Non-executive director recruitment

Embedding the principles of equality, diversity and inclusion in the board recruitment process.

The NHF’s Equality, Diversity and Inclusion in Housing member group has created this guide. It provides guidance to organisations who are recruiting non-executive members to their board. It is an example of good practice and is being piloted by a number of NHF members.

Introduction

Diversity, equality and inclusion are fundamentally important to good governance. Whilst the aim in any recruitment is always to appoint the best person to the role, when recruiting to boards or committees there are also wider considerations of how best to facilitate good decision-making as a board.

The best person will not always be the person with the best qualifications and experience, particularly if this replicates skills and experience already on the board and committee. The best person will be the person who provides a different perspective and different challenge from the people already on the board.

This guide has primarily been written with a focus on non-executive roles within housing associations but the principles will have application to other roles and other sectors. The guide is not exhaustive, it is intended as a helpful guide to housing associations to help attract and appoint the best people to boards and committees. The guide suggests six stages to recruitment and offers practical suggestions to improve practices in each one.

The NHF Code of Governance 2020 requires boards who have signed up to it to demonstrate “a clear and active commitment to achieve equality of opportunity, diversity and inclusion in all of the organisation’s activities, as well as in its own composition”.

I also commits organisations to ensuring that the “membership of board and committees comprises people with diverse backgrounds and attributes, having regard to the diversity of the communities the organisation serves and in line with the organisation’s stated commitments to equality, diversity and inclusion.”

1. Understand what you need

Boards should carefully consider the balance of skills and experience on their board and committees. This will ensure that they meet the requirement within the Code of Governance for the organisation to be “led by a skilled and diverse board which regularly reviews and capably manages its own performance and effectiveness.”

The Code of Governance also requires organisations to ensure that people with “direct lived experience of (or particular insight into) the communities served by the organisation are meaningfully engaged in governance structures”. People with protected characteristics in terms of gender, age, race and disability – as well as people from more disadvantaged socio-economic groups – are over-represented in terms of people living in social housing. A push to increase involvement from social housing residents is therefore likely to also increase diversity in these areas.

The change to a six-year maximum term as part of the Code of Governance 2020 will place a much stronger emphasis on housing associations to carefully plan recruitment in advance to their boards and committee structure.

In some cases, there will be a specific need of skills and experience for a role. This may be identified as part of a governance review or to replace valued skills and experience of a board or committee member who is leaving or reaching the end of their term.

Not every board or committee member needs to have experience of working in social housing; in fact there are valuable insights available from people with experience in different sectors.

Where there is not a specific gap in the board or committee’s skills or experience it is better to be open to a range of possible options to maximise appeal and possible candidates.

Some boards or committees may already have significant representation from specific sectors or professions and additional members with those skills of qualifications may not improve decision-making. Where this is the case, organisations should be comfortable in making that assessment and be clear they do not wish to recruit additional members from those sectors or professions at a given point in time.

2. Clearly state your need

The need of the organisation should be clear in an advert and person specification. This is an opportunity to explain the key requirements for the position – it should not exclude people who may be able to achieve this in different ways.

It is appropriate to recruit with different requirements to boards and committees at different times, so at each recruitment (including if multiple roles are being recruited simultaneously) there are likely to be differences in advert and specification.

Only the actual requirements of the organisation, as identified above, should be asked for. Adding additional requirements will limit the appeal of the role and the pool of potential applicants.

Requirements for specific length of experience (such as ten years of experience) need to be considered, as they can directly exclude candidates with different experiences.

Requiring previous non-executive experience can significantly reduce the number of good candidates applying. For a well-functioning board, previous non-executive experience should not be a prerequisite for all recruits.

Recruiting organisations should create a fully accessible and comprehensive recruitment pack. This should include:

About us - background information about the recruiting organisation, including priorities for the organisation.
The role – a clear and targeted role profile, including responsibilities of the committees on which the role would sit.
Who you are looking for - detailing what skills, experience and diversity characteristics you are seeking to encourage to apply.
Further details - on the time commitment, remuneration (if applicable).

This pack should communicate the organisation’s authentic culture and values and include welcoming messages in the advert and recruitment pack specifically targeted at under-represented groups.

If you have identified a need to recruit people from a particular underrepresented group, state it in the advert to encourage applications from those people. For example:

We are a housing association providing homes to a mainly Black, Asian and minority ethnic community. We are aware of the lack of ethnic diversity on our board and are keen to address this. We want to ensure that the voices around our table better reflect the community we serve. For this reason, we would particularly welcome applicants who are from a Black, Asian or minority ethnic background.

3. Reach far and wide

Roles should be advertised far and wide in a range of media including specialist websites for targeted professions or under-represented groups. Some examples include:

Exec-appointments
Dynamic Boards
Women on Boards
Disability jobsite
Women in Social Housing
Housing Diversity Network

Social media can also be an effective channel for advertisement of board and committee roles.

A secret search is not an inclusive search. Make sure you get the word out about your board role.

Even if the recruitment is taking place through a recruiter, there should be proactive efforts by the organisation to source potential candidates to ensure strong and varied talent pools. The aim should be to ensure that every longlist has an extremely diverse set of talent and backgrounds.

The use of diversity-specific advertising media, including disability, LGBTQ+ and Black, Asian and minority ethnic targeted job boards can be an effective way of ensuring that board positions get the attention of the widest possible audience. This also signals to diverse audiences that the organisation is an open and engaged employer, which values and celebrates diversity.

In order to reach people in local communities advertising in local and regional employers such as banks, building societies, legal centres, solicitors' offices, hotels and supermarkets can be effective. As can notices/leaflets in council offices, health centres, libraries, sports centres and food banks. Some housing associations have had significant success in increasing resident applications for positions within their governance structure through targeted text messaging.

If you are using a recruiter then you need to be very clear from the outset on what skills and experiences you want. Make sure there are opportunities to review how well the recruiter has succeeded at engaging the communities you want to reach.

When looking for a recruiter, it’s important to make sure that they:

Deliver unknown candidates in applications (value is added through reaching people who could not have been reached through existing networks).
Propose a diverse longlist, which reflects the diversity of the communities in which the organisation works.
Demonstrate a clear commitment to equality, diversity and inclusion through their own working practices and culture.

4. Test what you need

It’s important to assess whether applicants have the required skills and experience that you need. It will not always be possible to do this perfectly but some principles that are set out below can help with this.

Focus more on the supporting statement than the CV, as this will demonstrate the applicant’s personal commitment and desire for the position. It also allows the applicant to explain how they meet the requirements clearly and in their own words, rather than leaving it to a process of deduction – which is likely to be fraught with potential bias.

A longer longlist will be more inclusive and give an opportunity for candidates that do not meet all the criteria in the brief to shine. If the longlist involved a physical interview or test this would need to be balanced against the cost and inconvenience to the applicant and the organisation for people with initially perceived lower chances of success. For this reason it is recommended that organisations proceed with a ‘video stage’ interview for longlist sifting. At this stage applicants would be asked to self-record short answers to up to three set questions (examples could include why do they want to be a board member? What difference do they think they can make to the board? What are the biggest challenges they think the organisation will face in the next five years?), which test their competence. Applicants should be able to record this at a time that is suitable for them and recruiting organisations can review when it suits them.

At the interview stage, make your interview panels as inclusive as possible, so any candidate from any background feels comfortable when they walk into the room. It is good practice to have, as a minimum commitment, gender-balanced interview panels. Ideally, a commitment to a minimum of one Black, Asian or minority ethnic person on an interview panel would also be applied, although in some organisations this may not be possible for board-level appointments.

In order to test someone’s ability as a board/committee member the interview stage should also have a practical element. The easiest way of doing this is providing a real and recent board/committee paper for them to review in advance and invite them to comment/ask questions upon it.

5. Review, reflect and reinforce

It is good practice to routinely review the impact of recruitment processes on people with different characteristics and to seek to understand why different groups may be disproportionately excluded at different points in the process (including initial application).

Utilising internal staff networks is one way that organisations can receive scrutiny of recruitment processes. These networks can identify good practice and make recommendations to diminish potential bias. Many organisations do this routinely for staff appointments and could extend the process to board appointments in the interests of transparency. This process can also be a vehicle to obtain wider feedback from diverse groups. If organisations do not want board and committee appointments to receive internal scrutiny, as a minimum they should ensure that the process receives regular review at the Remuneration Committee or equivalent and ensure this feedback is used to inform continuous improvement.

Organisations should have a planned induction and support process in place for new board/committee members.

6. Remove potential bias from all stages

In recruitment for non-executive positions, there are a large number of ways in which actual bias can be introduced to the process. These include advertising only on paid-for sites (which limits the pool to people with resources to do that), exclusive access sites (which limits the demographic), or to acquaintances of existing board members (again limiting the demographic). It can also be introduced through the requirements of the role – for example requiring previous non-executive experience means you will be unable to broaden the pool of potential applicants.

Addressing these actual biases should be a priority for recruitment, but almost everyone will be affected by unconscious bias, which can be shaped by experience or the natural inclination to gravitate towards someone who looks, speaks and thinks like you. This, by its nature, is much more difficult to eliminate. The presence of unconscious bias can be one of the reasons why objectively fair and open recruitment processes deliver unrepresentative results.